UK economy has surprised analysts with a stronger-than-expected growth rate of 0.7% in the first quarter of the year, driven primarily by the services sector.
Gatekeepers News reports that the production, according to the Office for National Statistics (ONS), also contributed significantly to this growth.
Chancellor Rachel Reeves hailed the figures as evidence of “the strength and potential of the UK economy,” highlighting that the UK has outperformed major economies like the US, Canada, France, Italy and Germany during this period.
However, not everyone shares the optimism. Shadow Chancellor Mel Stride criticised the government’s decisions, particularly the increase in employers’ National Insurance payments, which he termed a “jobs tax.”
He warned that these decisions could jeopardise the economy’s progress, saying, “Labour inherited the fastest-growing economy in the G7, but their decisions have put that progress at risk.”
Breaking down the figures, the ONS reported a 0.2% growth in March, surpassing forecasts of zero growth.
Liz Martins, Senior UK Economist at HSBC, expressed cautious optimism, noting that business investment rose nearly 6% on the quarter and the service sector performed well.
In contrast, Paul Dales at Capital Economics was more sceptical, suggesting this growth might be a peak for the year due to activities being brought forward ahead of US tariffs and tax increases.
